The American Gaming Association (AGA) has expressed its support for legislation to restore the 100% deduction for gambling losses. This support comes as a direct response to U.S. Rep Dina Titus’s introduction of the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act. The act aims to reinstate the full deduction for gambling losses, a move welcomed by both gamblers and lawmakers.
Gambling Loss Deduction Sparks Debate
Previously, a provision reducing the deduction of gambling losses to 90% was signed into law, with the aim to generate $1.1 billion in revenue. However, this change has provoked concern among stakeholders, including gamblers, who worry about the potential for pushing bettors into illegal markets. AGA, while initially silent on the deduction reduction, had addressed these concerns in a letter sent to the Committee on Ways and Means. The letter highlighted that for more than half a century, taxpayers who itemize have legally deducted gambling losses against winnings to calculate net taxable income.
“The deduction is crucial for measuring income accurately and fairly,” the letter stated, emphasizing the need to maintain it for both itemizers and non-itemizers. This is vital to prevent taxpayers in a losing position from being unfairly taxed on income they haven’t actually received.
AGA’s Call for Tax Reforms
Along with supporting the FAIR BET Act, the AGA advocates various tax reforms beneficial to the legal and regulated gaming industry. These include increasing the slot tax-reporting threshold, repealing the sports betting excise tax, extending bonus depreciation, and adjusting corporate tax rates. These measures, according to the AGA, will encourage economic growth and reinvestment within the industry.
The U.S. gaming industry currently boasts an impressive contribution to the nation’s economy, with $329 billion in total economic output and $53 billion in tax contributions. The industry supports 1.8 million jobs, generating $104 billion in labor income. Direct employment in casinos, gaming equipment manufacturers, and related businesses underscores the industry’s vital economic role.
In light of this, the AGA continues to engage with lawmakers to ensure fair tax policies and advocate for their extension to truly benefit the growing online gambling sector and beyond.
